Consumer Finance Litigation

In Prevratil v. Deutsche Bank Nat'l Trust Co., 38 Fla. L. Weekly D569 (Fla. 2d DCA March 8, 2013), the Florida Second District Court of Appeal continue the trend of Florida Appellate Court reversals of over-zealous trial court judges reading more into the requirement in Rule 1.110(b) that foreclosure complaints be verified. Previously, Florida's appellate courts have held that the verification of a foreclosure complaint need not comply with Fla. Stat. 92.525 (requiring attestation that facts "true" without qualification as to the signors knowledge and belief), see Trucap Grantor Trust 2010-1 v. Pelt, 84 So. 3d 369, 372 (Fla. 2d DCA 2012) rev. denied, 103 So. 3d 141 (Fla. 2012), and that the verification may be included on a separate page, Becker v. Deutsche Bank Nat. Trust Co., 88 So. 3d 361, 362 (Fla. 4th DCA 2012), reh'g denied (June 5, 2012). See also BAC Home Loan Servicing, L.P. v. Stentz, 91 So. 3d 235, 236 (Fla. 2d DCA 2012). The Appeals Court noted that they would not read more into Rule 1.110(b) than the rule required. Stentz, 91. So. 3d at 236. Now the Second District Court of Appeal has weighed in on whether or not a loan servicer, as the mortagee's attorney in fact, can execute the verification of a complaint brought in the name of the mortgagee. The Defendant asserted that, based upon the Florida Supreme Court's explanation of Rule 1.110(b)'s requirements in In re Amendments to the Florida Rules of Civil Procedure, 44 So. 3d 555, 556 (Fla. 2010), the trial court could infer that the rule required the Plaintiff, and not its attorney in fact, to execute the verification. The Defendant further argued that since Florida Statute Section 709.08(7)(b)(2) provides that an attorney in fact may not make any affidavit as to the personal knowledge of the principal, the servicer, as attorney in fact, could not verify the Complaint. The Second District Court of Appeals found both rationales unavailing. Prevratil, 38 Fla. L. Weekly D569. Instead, the Second District Court of Appeal held that the prohibition on attorney's executing affidavits based upon the personal knowledge of their principal found in Section 709.08 did not apply because Rule 1.110 does not require verification based upon personal knowledge. Furthermore, the Court held that the servicer could execute the verification on behalf of the mortgagee since the servicer presented a valid power of attorney which predated the filing of the Complaint and expressly authorized the servicer to act as the mortgagee's attorney in, amongst other things, the foreclosure. As a result, the Second District Court of Appeal concluded that the trial court "departed from the essential requirements of law by requiring [the mortgagee], not its loan servicer, to verify the foreclosure complaint." Prevratil, 38 Fla. L. Weekly D569. As a result of the Second District Court of Appeals' decision mortgagees can feel fairly confident that so long as the Complaint is properly verified by the servicer as the Mortgagee's attorney in fact, Rule 1.110(b) does not require that the Mortgagee physically execute the foreclosure complaint verification. It is important that the power of attorney both predate the verification of the complaint and authorize the servicer to act as the Mortgagee's attorney in the foreclosure. One additional noteworthy point in the Prevratil opinion is the Court's aside that while the servicer may verify the complaint, the Mortgagee would still be responsible for its agent's verification, and thus was not entirely relieved from its due diligence responsibility. As a consequence, while Mortgagees may delegate the preparation of the paperwork to their servicers, they should still undertake to put in place safe-guards to ensure that information in verified foreclosure complaints is true and correct lest they be held accountable for inaccuracies in verified foreclosure complaints prepared and verified by their servicers acting pursuant to a power of attorney. For more information on consumer finance litigation topics, please contact one of the Burr & Forman team members for assistance. We are happy to answer any questions or concerns you may have.